Protocol Overview

Yellow Network is a decentralised clearing and settlement infrastructure that operates as a Layer-3 overlay on top of existing blockchains. It enables businesses — brokers, exchanges, and application developers — to move digital assets across multiple blockchain networks through a unified peer-to-peer ledger, without relying on a centralised intermediary.

The YELLOW token is only intended to provide access to the goods and services supplied by Layer3 Fintech Ltd. within the Yellow Network. Node operators post YELLOW as a mandatory functional security deposit to operate clearnode infrastructure. App builders post YELLOW as a service quality guarantee on the AppRegistry. The Treasury holds Foundation assets used to fund continued research, development, and delivery of the goods and services accessible through YELLOW.

Architecture

The Yellow Network operates as a three-layer architecture:

• Layer 1 (EVM Settlement) — Smart contracts deployed on each supported chain (Ethereum, Base, Arbitrum, Linea, BNB, and Polygon) provide on-chain asset custody, the NodeRegistry for node operator registration and collateral management, the AppRegistry for application registration, and collateral slashing enforcement.
• Layer 2 (Ledger Layer — Yellow Clearnet) — A distributed peer-to-peer ledger that operates off-chain. Independent node operators form a decentralised network where each user account is guarded by a group of nodes using threshold cryptographic signatures. No single node can unilaterally move funds.
• Layer 3 (Application Layer) — Applications built on top of the Ledger Layer, including the Yellow App Store, SDK-built applications, and dispute adjudication through independent arbitration forums.

On-Chain Contract Layout

Node operators post YELLOW ──► NodeRegistry (collateral + parameter admin)
                                                                    │
App builders post YELLOW ─────► AppRegistry (collateral + slashing) │
                                                                    │
Foundation ───────────────────► Treasury (Foundation assets)         │
                                                                    │
                     YellowGovernor ──► TimelockController ─────────┘
                     (parameter proposals)  (delayed execution)

Contracts

Contract	Purpose	Key Interface
YellowToken	ERC-20 utility token, fixed 10B supply, EIP-2612 permit	IERC20, IERC20Permit
Locker	Abstract single-asset vault with time-locked withdrawals	ILock
NodeRegistry	Node operator collateral with protocol parameter administration	ILock, IVotes
AppRegistry	App builder collateral with adjudicator slashing	ILock, ISlash, AccessControl
YellowGovernor	Protocol parameter proposals and operator consensus	IGovernor
TimelockController	Delayed execution of parameter changes	OZ TimelockController
Treasury	Foundation vault for ETH and ERC-20 assets	Ownable2Step
Faucet	Testnet token dispenser (Sepolia only)	—

Token

• Fixed supply: 10,000,000,000 YELLOW (10 billion) — no new tokens can ever be created
• No mint/burn: supply is fixed at deployment
• Permit: EIP-2612 gasless approvals
• Utility: only intended to provide access to Yellow Network services supplied by Layer3 Fintech Ltd.

Access Control Summary

Role	Held By	Can Do
NodeRegistry — no roles	Open	Anyone can lock/unlock
AppRegistry DEFAULT_ADMIN_ROLE	TimelockController	Grant/revoke adjudicators, set slash cooldown
AppRegistry ADJUDICATOR_ROLE	Adjudicator address(es)	Slash misbehaving app builders
Governor proposer	Any active node operator with sufficient collateral	Create parameter change proposals
Governor proposal guardian	Foundation multisig	Cancel any proposal (emergency)
TimelockController executor	Open (anyone)	Execute queued proposals after delay
Treasury owner	Foundation or TimelockController	Transfer funds out

Security Model

• Value-at-Risk collateral — the protocol dynamically ensures that total collateral posted by nodes guarding any account exceeds the value of assets held, making fraud economically irrational
• Timelock delay — all parameter changes are delayed (default 2 days), giving participants time to respond
• Quorum floor — absolute minimum quorum prevents parameter capture when total locked supply is low
• Late quorum protection — deadline extends if quorum is reached late, preventing last-second manipulation
• Proposal guardian — Foundation can emergency-cancel proposals; removable via parameter administration
• Slash cooldown — rate-limits slashing to prevent batch-draining by a rogue adjudicator
• Unlock period — 14-day withdrawal delay prevents flash-loan attacks on the collateral system
• Ownable2Step — Treasury ownership transfer requires explicit acceptance